BRF is expanding its operations in Saudi Arabia through an acquisition that should help the country achieve its goal of securing a supply of locally produced food.
BRF Arabia, a joint venture with the Saudi Public Investment Fund, said on Thursday it is investing 316.2 million Saudi ryals ($84.3 million) to buy a 26% stake in Addoha Poultry, one of 10 largest chicken suppliers in the country. The investment marks BRF’s entry into chicken production in the country.
The investment underscores Saudi Arabia’s confidence in the Brazilian food giant to achieve its goal of having 80% of its chicken produced locally by 2030, up from around 70% currently. The agreement is also seen as helping BRF expand its presence in one of the company’s most important markets in the Middle East.
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Of the total investment, almost US$58 million will be reserved for expanding chicken production and industrial plants, as existing facilities are operating at almost maximum capacity, said Igor Marti, vice president of Halal Market at BRF, in an interview.
The investment fund’s affiliate, Saudi Agricultural and Livestock Investment, is BRF’s second largest shareholder, holding 11% of the company’s shares.
